What is ENOG.L's Intrinsic value?

Energean PLC (ENOG.L) Intrinsic Value Analysis

Executive Summary

As of May 24, 2025, Energean PLC's estimated intrinsic value ranges from $2428.89 to $2817.61 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $2817.61 +228.0%
Dividend Discount Model (Stable) $2428.89 +182.8%

Is Energean PLC (ENOG.L) undervalued or overvalued?

With the current market price at $859.00, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Energean PLC's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.45 0.84
Cost of equity 6.7% 10.8%
Cost of debt 7.0% 7.6%
Tax rate 26.0% 34.9%
Debt/Equity ratio 1.42 1.42
After-tax WACC 5.8% 7.4%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 116.9%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.8%
  • Long-term growth rate: 4.0%
  • Fair value: $2817.61 (228.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.8% (Low) to 6.7% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $913 to $5,540
  • Selected fair value: $2428.89 (182.8% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $1579M
Enterprise Value $3792M
Trailing P/E 11.15
Forward P/E 14.21
Trailing EV/EBITDA 2.80
Current Dividend Yield 953.37%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.42

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 57% $563.52
Dividend Discount Model (Stable) 43% $364.33
Weighted Average 100% $2651.01

Investment Conclusion

Based on our comprehensive valuation analysis, Energean PLC's weighted average intrinsic value is $2651.01, which is approximately 208.6% above the current market price of $859.00.

Key investment considerations:

  • Strong projected earnings growth (9% to 19% margin)
  • Consistent cash flow generation

Given these factors, we believe Energean PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.